TITLE VI – SALES

Chapter 2 CAPACITY TO BUY OR SELL

WHO MAY ENTER INTO A CONTRACT OF SALE?

Art. 1489. All persons who are authorized in this Code to obligate themselves, may
enter into a contract of sale, saving the modifications contained in the following
articles.

Where necessaries are sold and delivered to a minor or other person without
capacity to act, he must pay a reasonable price therefor. Necessaries are those
referred to in Article 290.

General Rule: GR: All persons, whether natural or juridical, who can bind themselves, have legal
capacity to buy and sell (NCC, Art. 1489(1)]

Exceptions: Those who are absolutely and relatively incapacitated to bind themselves to either
buy or sell.

ABSOLUTE INCAPACITY – persons who cannot bind themselves.

Art. 1327. The following cannot give consent to a contract:

(1) Unemancipated minors;

(2) Insane or demented persons, and deaf-mutes who do not know how to write.

1. Minors, insane and demented persons and deaf-mutes who do not know how to write;

Minors:
GR: Voidable, subject to annulment or ratification.

EXCEPTION: Necessaries sold and delivered to a minor.

Where necessaries are sold and delivered to a minor or other person without
capacity to act, he must pay a reasonable price therefor. Necessaries are those
referred to in Article 290. ( Art. 1489)

Necessaries : These are items for the support of the minors that are indispensable for
sustenance, dwelling, clothing, medical attendance, education.

2. Persons under a state of drunkenness or during hypnotic spell; (Article 1328)

 Art. 1328. Contracts entered into during a lucid interval are valid. Contracts agreed to
in a state of drunkenness or during a hypnotic spell are voidable.

RELATIVE INCAPACITY – when certain persons, under certain circumstances, cannot buy
certain properties.

Art. 1490. The husband and the wife cannot sell property to each other, except: (1)
When a separation of property was agreed upon in the marriage settlements; or (2)
When there has been a judicial separation of property under Article 191.

Art. 1491. The following persons cannot acquire by purchase, even at a public or
judicial auction, either in person or through the mediation of another:

(1) The guardian, the property of the person or persons who may be under his
guardianship;

(2) Agents, the property whose administration or sale may have been intrusted to
them, unless the consent of the principal has been given;

(3) Executors and administrators, the property of the estate under administration;

(4) Public offi cers and employees, the property of the State or of any subdivision
thereof, or of any governmentowned or controlled corporation or institution, the
administration of which has been intrusted to them; this provision shall apply to judges
and government experts who, in any manner whatsoever, take part in the sale;

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and
other offi cers and employees connected with the administration of justice, the
property and rights in litigation or levied upon an execution before the court within
whose jurisdiction or territory they exercise their respective functions; this prohibition
includes the act of acquiring by assignment and shall apply to lawyers, with respect to
the property and rights which may be the object of any litigation in which they may
take part by virtue of their profession;

(6) Any others specially disqualified by law.

RELATIVE INCAPACITY – when certain persons, under certain circumstances, cannot buy
certain properties.

1. Sale by and between spouses (Article 1490);

A. Sale between spouses:

GR: Null and Void

 EXCEPTIONS:

1. When a regime of separation of property was agreed upon in the marriage

settlement; or

2. When there has been a judicial separation of property agreed upon

between them. (Article 135 of Family Code, par. 2)

3. Moderate gifts on the occasion of family rejoicing (Article 87, Family Code)

2. Sale between guardians and wards (Article 1491, par. 1)

3. Sale between agents and principals (Article 1491, par. 2)

Exception: if the principal has given consent thereto. (Article 1491, par. 2)

4. Sale between executors and administrators of estate of the deceased. (Article 1491, par. 3)

5. Sale by public officers and employees involving government property (Article 1491, par. 4)

6. Court Officers and Employees. (Article 1491, par. 5)

7. Others specially disqualified by law

Persons specially disqualified by law to enter into contracts of sale

1. ALIENs who are disqualified to purchase private agricultural lands (Art. XII Secs.
3&7, 1987 Constitution).

2. Unpaid seller having a right of lien or having stopped the goods in transit is
prohibited from buying the goods either directly or indirectly in the resale of the same
at public/private sale which he may make [NCC, Art. 1533(5) and Art. 1476(4)].

3. The Officer holding the execution or deputy cannot become a purchaser or be

interested directly or indirectly on any purchase at an execution (Sec. 21 Rule 39, Rules
of Court).

4. In Sale by auction, seller cannot bid unless notice has been given that such sale is
subject to a right to bid in behalf of the seller (NCC, Art. 1476).

Applicability of Relative Incapacity to Legal Redemption,

Compromises, and Renunciation

Art. 1492. The prohibitions in the two preceding articles are applicable to sales in legal redemption,
compromise and renunciations.

(a) legal redemption (Art. 1619, Civil Code);

Art. 1619. Legal redemption is the right to be subrogated, upon the same terms and conditions
stipulated in the contract, in the place of one who acquires a thing by purchase or dation in payment, or
by any other transaction whereby ownership is transmitted by onerous title.

(b) compromises (Art. 2028, Civil Code);

Art. 2018. A compromise is a contract whereby the parties, by making reciprocal concessions, avoid
litigation or put an end to one already commenced.

(c) renunciation (Arts. 6 and 1270, Civil Code).

Art. 6. Rights may be waived, unless the waiver is contrary to law, public order, public policy, morals or
good customs or prejudicial to a third person with a right recognized by law.

Art. 1270. Condonation or remission is essentially gratuitous, and requires the acceptance by the
obligor. It may be made expressly or impliedly. One and the other kinds shall be subject to the rules
which govern inofficious donations. Express condonation shall, furthermore, comply with the forms of
donation.
 Chapter 3 EFFECTS OF THE CONTRACT WHEN
THE THING SOLD HAS BEEN LOST

Art. 1493. If at the time the contract of sale is perfected, the thing which is the object of the contract has
been entirely lost, the contract shall be without any effect.

But if the thing should have been lost in part only the vendee may choose between withdrawing from
the contract and demanding the remaining part, paying its price in proportion to the total sum agreed
upon.

Loss of Object Before Sale

This refers to loss of the object before the perfection of the contract. Since there would be no cause or
consideration, the contract is void. The seller bears the loss.

Total Loss: Has no effect; void.

Partial Loss: The vendee has the following remedies:

1. Withdrawal (Rescission)

2. Specific performance as to the remainder (by payment of the proportional price_